GLOBAL FINANCIAL CRIME REVIEW
Germany ’ s new AML authority and its uphill battle
When Lisa Paus , a financial expert in Germany ’ s Green Party , tried to identify the owners of the Kundamm-Karee ‘ Fürst ’ project , she hit a wall . The approximately 635,071-square-foot urban area that would house office spaces , retail stores and art galleries at Kurfürstendamm , one of Berlin ’ s most well-known avenues , had switched proprietors seven times in 2021 , costing € 1.02 billion euros ($ 1.32 billion ). Suspecting Russian oligarchs behind the enterprise , Paus dug as deep as she could , finding it impossible to bring the identity of the possessor ( s ) to light . 1
The concealment of beneficial ownership is one of the many issues that Germany faces in its fight against financial crime . In 2022 , the Financial Action Task Force ’ s ( FATF ) assessment of the country noted numerous shortcomings , including a lack of controls , disjointed supervision and excessive cash handling , among others . Christian Lindner , Germany ’ s finance minister , went so far as to call his country a “ money laundering paradise .” 2
To curb the flow of illicit money , the Ministry of Finance announced in July 2023 the creation of the Federal Authority for Fighting Financial Crime ( BBF ), a national agency to battle the country ’ s money laundering woes and develop expertise on the subject . 3 What uphill battles will it have to face in the coming future ?
Cash is king
Limits on cash transactions in Germany are extremely lax , exacerbating one of the country ’ s most significant challenges in combating money laundering . An individual is capable of spending € 10,000 euros ($ 10,991.75 ) without the need to identify themselves . In 2020 , an exception was imposed on buyers of precious metals who spend more than € 2,000 euros ($ 2,198.35 ). 4
The ease of use of cash has turned Germany into a refuge for criminals . The turmoil caused by the reunification of the country in 1991 meant that the former German Democratic Republic states needed private investments to counter the dire economic situation . Their neglect and inadequate response to organized crime at the time opened the floodgates to Italian Mafia clans who began to take over the real estate market . 5
“ In Italy it is forbidden to buy anything for more than € 1.000 [$ 1,098.60 ] in cash ,” anti-corruption campaigner and tax policy specialist Christoph Trautvetter stated in an interview with Exberliner . “ But in Germany , you can bring suitcases full of cash and buy a house .” 6
Financial expert Lisa Paus of Germany ’ s Green Party . Credit : Jens Kalaene / dpa / Alamy Live News
108 acamstoday . org